Greg Mankiw makes a fool of himself — again

One thing that commentators sometimes fail to notice is that the big increase in the one percent’s income share came between 1980 and 2000. Since 2000, it has fluctuated but without much of a trend. Why, then, are we all talking about income inequality only now? I am not sure. One hypothesis is that we don’t worry about inequality when everyone is doing well. Another hypothesis is that we now have a president with a political ideology that sees inequality as especially pernicious.

“Fail to notice”? “Only now”? Wonder on which planet Greg has been living the last twenty years …

Added February 2: Responding to my critique, Greg Mankiw has a new post up today where he inter alia tries to explain what he really meant by “all.” Notwithstanding his elucidations on the term’s denotation, there are still — and more importantly — a lot of dubious argumentation re inequality in Mankiw’s writings, as yours truly previously has highlighted e. g. here, here, and here.

16 Comments

I cannot see anything other than a tremendous backpeddling here. Just a few short years ago, inequality was not even acknowledged as a problem by people like him, it was presented as something good. The fact that these people are acknowledge the problem and try to explain it away, shows them shaking in their boots.

“Just a few short years ago, inequality was not even acknowledged as a problem by people like him…”

Yep.

Krugman:Pre-2008: When I would talk to lay audiences about inequality, I would mention that we were reaching levels not seen since 1929 – and that would inevitably lead to questions about whether we would soon have another Depression. No, I’d say – there really isn’t a clear reason why high inequality should lead to macroeconomic crisis.

[…] Professor Lars Syll thinks I made of fool of myself in a previous post when I wondered why we have only recently started discussing income inequality so extensively, even though the increase in inequality occurred mainly between 1980 and 2000. He writes, “Wonder on which planet Greg has been living the last twenty years.” […]

I think the term “income inequality” is just a more recent construction of language for a topic that was much discussed at other times , like during the Depression. Using Google’s Ngram viewer with other reasonable proxies for income inequality – like “plutocracy” or “tycoon”- you can see that it’s not such a new concept.

Here’s what I wonder – does Mankiw have any idea that he comes off as a rancid douchebag when he makes posts like this ?

BTW , it’s pretty easy to see why he thinks the NYT chronicle website is so “cool” – it gives him just the answer he’s looking for.

Plug in “Great Depression” and what do you see ? A low baseline , then a big spike right before the “income inequality” spike. But no other spikes for “Great Depression” , even in the 1930’s during the event itself. Now , this could be for two reasons : 1) the tool is essentially worthless for making the type of historical comparison that Mankiw is making or 2) that the GD wasn’t called the GD in the 1930’s , in which case you have to consider the likelihood , as I outlined above , that “income inequality” or “inequality” can be discussed using a variety of terminologies , leading to the same kind of misleading results as for “Great Depression”.

Or we have an economist who does not want to see inequality as particularly pernicious. Jacques Chirac was elected on the discourse of “la fracture sociale.” Long before Obama created what Mankiw seems to be saying is made up ideological drama.”

Mankiw is right in saying the interest in inequality has grown recently. It happened since the Pope spoke of it, after Obama picked up on what the Pope said. Inequality suddenly became topical and more in the media. You don’t need to criticize Mankiw for noticing.

Every now and then I get some upset comments from people wondering why I’m not always respectful of people like Eugene Fama, Robert Lucas, Greg Mankiw and others of the same ilk. Here’s a good hint at why it might sometimes be quite appropriate to be disrespectful:

Why can’t I be serious and respectful? Well, the answer is that we’re not having a serious conversation. There are real debates in economics — for example, about how much slack remains in the economy, how effective unconventional monetary policy really is, etc.. For those debates a respectful tone is appropriate. But when people resurrect 80-year-old fallacies, then claim that they never said what they said, then come right back with the same thing, we need colorful language to convey the deep unseriousness of their position.

His first post, as you correctly quote above, clearly says “commentators.” That is a broad term usually referring to pundits, editors, bloggers, authors, and to some extent politicians. In his second post, he explains this, since you failed to grasp it, and he did so in a civil tone. I think his point stands.

I don’t see the issue here. Prof. Mankiw is correct, the general public has only recently been debating this issue. As Mankiw points out his own textbook covered this issue 20 years ago, so it’s not like he’s making this up.

Comments Policy

I like comments. Follow netiquette. Comments — especially anonymous ones — with pseudo argumentations, abusive language or irrelevant links will not be posted. And please remember — being a full-time professor leaves only limited time to respond to comments.